Finance Platform Velocity Announces ₹400 Cr Festive Fund for D2C Brands

The capital will help D2C brands prepare for a surge in demand during the upcoming holiday season.

New Delhi:Finance platform Velocity has earmarked ₹400 crore to meet the financing needs of D2C and e-commerce brands during the upcoming festive season, the company said in a statement on Monday.

“As more and more Indian consumers are turning to online shopping for convenience and personalized experiences, we are witnessing a significant shift towards e-commerce, with India projected to be the world’s third largest online market, reaching $325 billion and attracting 500 million shoppers by 2030,” said Abhiroop Medhekar, Co-Founder and Chief Executive Officer (CEO), Velocity. “Velocity’s debt financing is designed to enable D2C and e-commerce brands to scale their operations, optimize inventory, and implement effective marketing strategies. By providing them with the financial support they need, we are excited to support the growth of several brands as they prepare to capitalize on the holiday season demand and e-commerce growth.”

This year’s allocation is over 60 per cent higher than the ₹ 250 crores earmarked by Velocity for 2023, confirming industry expectations of a bigger festive season in 2024, the release added.

This funding will support brands and merchants on major e-commerce platforms (such as Amazon, Flipkart, Myntra, and Shopify) and emerging QSR platforms (such as Blinkit, Instamart, and Zepto) to enhance product assortments, accelerate delivery times, and leverage emerging trends such as premiumization. QSR has become an important sales channel for brands this year, accounting for 15-30% of sales depending on the category.

Velocity has consistently funded digital brands, supporting the growth and success of many D2C businesses. Over the last four years, Velocity has leveraged its partnerships with leading Indian NBFCs and regulated entities to power over 1500 e-commerce brands such as Koskii, Power Gummies, Hammer, Bella Vita Organic, Bewakoof, Bunaai, Leaf, Crossbeats, Blaupunkt, Zlade and Soulflower, among others.

Several brands have already secured funding from Velocity to help boost their growth in the 2024 holiday season. Due to the huge increase in demand during the holiday season, one of the biggest issues that e-commerce retailers in particular face is running out of stock due to lack of inventory. With the financial support, these brands will now have enough funds to properly stock their inventory to meet the holiday demand.

Velocity has disbursed over ₹900 crores, enabling over 1,500 companies, primarily D2C and e-commerce businesses, to overcome their working capital challenges. The Bengaluru-based fintech firm raised $30 million in equity under the leadership of Peter Thiel’s Valar Ventures. Its portfolio includes many of India’s fastest-growing D2C brands, such as Soulflower, Chumbak, and Off Duty.